Can I Return My Car to the Dealership?


Have you ever been excited to buy a brand new car only to find out that the added taxes, insurance and other fees bumped you well over the “sticker price”? This leads to car owners getting behind on their auto payments and wondering what they can do to get out of the situation.

Can you relate? Do you simply want to take the car back to the dealership and forget about it? What happens if you can no longer afford the car payments and want to return it to the dealership?

Here are the exact steps you can take.

1. Come to Grips With the Numbers

Some experts say that your auto expense, which includes your car payment, maintenance, and insurance, should not be more than 15-20% of your take-home pay. If your outgoing expenses total more than that, your best bet is to confront the situation head-on and evaluate the solutions.

Take a look at your budget and see where you can cut back on other expenses like eating out, entertainment and frivolous spending. Is there something you can do to increase your income to generate more revenue to catch up on your auto payments?

Check your rate on a debt-consolidation loan (you can check your rate without hurting your credit using ReadyForZero’s tool). Can you get a reduced rate on your existing loans or lower your monthly payments?

See if you qualify for better terms on an auto loan. You can find the loans we recommend on our site here.

If you’ve done all you can and you still can’t make the payments on your car, there are several actions you can take:

2. Go Back to the Car Dealer

The first option is to head back to the dealer and see if you can trade in your current vehicle for a less expensive one. You can generally get a great deal on a nice used car that won’t have a huge price tag attached to it.

Thankfully, some car brands and states have friendly return policies, but there’s a chance you’ll still lose out due to the value of a new car depreciating so quickly. You may not get the full amount of what you paid for the car, which means you’ll be responsible for paying off the remaining loan balance yourself.

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3. Sell the Vehicle Privately

Another smart option is to sell the car privately to a colleague or friend, so you can get more money to pay off the large car loan. Most of the time you get a higher price for the vehicle by selling it directly to an individual, than you would if you sold it back to the dealership.

If you still have a remaining balance on the car loan after selling it privately, you could consider taking out a personal loan from a local bank or credit union. This isn’t the best scenario but it’s a smart solution considering the circumstances.

4. Find Someone to Take Over the Payments

Lastly, put out the word that you’re looking for someone to take over the car payments. Do an online search for anyone looking to relieve you of the auto loan balance. Then advertise on sites like Craigslist or eBay Motors to find potential buyers.

This method could save you a lot of hassle of dealing with creditors and the original lender, while allowing you to get rid of the budget-busting car payments. All you have to do is both agree to refinance the auto loan into the name of the new buyer, and you’re all set.

5. Do a Voluntary Repossession

If you’ve exhausted the above options, there’s one last-ditch thing you can do; a voluntary repossession.

A voluntary repossession is where you voluntarily surrender your vehicle (or other property) that’s connected to a loan, in to the lender where you financed the purchase. This generally occurs when you have fallen behind so far in payments that it’s the only option available. This will keep you from having to face creditors and other legal action in the future.

To voluntarily surrender your vehicle to the original lender, you first have to contact the creditor to explain your decision. Let them know you can no longer make payments and wish to surrender the vehicle. Once you’ve let the creditor know about the situation, they will verify the location where you can drop off the car, as well as the details for processing the repossession.

Don’t be surprised, however, if they try to talk you out of doing a voluntary repossession, since they want to continue making money off your loan. Many times they will offer ideas on how you can afford the car, as well as strategies to make the payments on time.

While you may find this helpful, if you truly can’t afford to keep the vehicle then stand your ground and go forward with the voluntary repossession. But before doing so, make sure you understand the entire process:

Will a voluntary repossession affect your credit? Yes, a voluntary repossession affects your credit rating the same way a regular repossession process would. So don’t be surprised if you see your credit score fluctuate during this time period.

Will you still owe money if you turn in the car? If the car depreciates in value to where you owe more on the loan than what the car is worth, yes, you’ll have to personally cover the remaining balance. Even if the original lender agrees to buy back the car, there will likely be an outstanding loan balance due. As mentioned above, you can take out a personal loan, or find ways to increase your income to pay off the remaining loan.

Once you’ve come to grips with the fact that you can’t afford your new car, you’re not stuck with it. There are steps you can take to regain control of your financial situation, without hurting your future too much (and remember, ReadyForZero can help you get your debt under control).

Image Credit: Thomas Hawk

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  • Billiam

    Thanks for the post Carrie.

    How does #3 work? In other words, since the bank still has the title, how do you sign the car sale over to the buyer? How does the buyer apply for a title in their name? Do they just need some sort of sale slip proving change of ownership?

    So then with the car being sold, but still owing the original auto finance bank, you would then pay that bank the new buyer’s purchase price, then continue to make payments on the outstanding balance?


    Also as a side note there are a couple of typos in the article you may wish to edit:
    1) “Do an online search for anyone looking to take relieve you of the auto loan balance.”
    2) There’s a rogue quote character in the first paragraph of #3.


    • Hi there, yes, with #3 you would have to get the funds from the private sale of the car and then combine that with money from another source (a smaller loan from a credit union for example) in order to pay off your car loan so the new owner can take the title. Then you might still have a new loan but the balance would be much smaller. Hope that helps! Also, thanks for catching those typos!

  • jonny wish bone

    I recently bought a car and was pre approved by my bank that i only wanted to go threw .i mentioned and made it very clear to dealer ship .they agreed to contact them on mon and get it done seeing i bought on a sun.1 1/2 weeks pass and my banker called to see if i found one .told her he was supposed handle it as i was told.long story short .the dealer not once called her and sent me a payment that was way out of line .i was not happy with the situation. So i told him i am returning this truck..pls call me back has been a month and he just called told him i am droppn of..the gm said no i am stuck this true ..i didnt purchase a return contract ….pls help ..

    • Hi Jonny, I’m sorry to hear about this. As you’ve found out, the dealerships are usually not on your side. They like to find opportunities to make more money off of you. So the question in this case is whether you have the right to return the car, since they promised to work with the bank you had mentioned to them. This sounds like a possible legal issue, so I would suggest contacting a lawyer and telling them what happened. They should be able to help you figure out your best course of action. Good luck!

      • Jennifer Paine

        This discussion is old, but I wanted to post anyway. First, there are two sides to every story, and this story doesn’t make sense for a few reasons. (Explain shortly). Second, yes, there are some scumbag dealers out there, but please don’t lump all dealers into that category Benjamin. Just like any retail operation, a profit has to be made…..not a gouging profit, yet a profit. That’s business economics for dummies 101. (Walmart might 200% on toilet paper, yet nobody argues).

        Anyways, here are the facts. If the customer didn’t have cash (albeit in any form…..meaning actual cash, a loan check from the customers lender or a personal and/or certified check), the dealership would have to have the customer sign a finance contract. Either specific to the lender or a general one with the lenders name on it. (The forms can vary by state). However, all finance forms, (aka installment contracts) have a federal truth in lending disclosure box. Did I mention….FEDERAL truth in lending? This box shows the principal amount financed, the apr, the monthly payments, the term and the accrued interest charges over the course of the term.

        So to have a buyer say, they didn’t contact my lender? Let’s put it this way…..u are selling a car, for any amount, If you don’t have verified funds in hand, or a loan agreement that an independent lender approves so that you can receive your funds from said lender, are you going to let the buyer leave with your property? Anyone in their right mind wouldnt, even the scuzziest of buy here pay here lots.

        Get your facts straight. Oh yeah, and when you publish a blogpost, respond to the comments. I know why you blog, but that is a whole other topic, and I don’t want to further bore people who came here for car loan advice.

        • Suzie Muniz

          Actually Jennifer it’s possible because it just happened to my husband. It was late and they said the banks were closed so they didn’t have the info or anything and would get back to my husband when he went in to finalize the paper work. We went back in hopes of returning the caright and they said we had signed and it was too late. Yet, my husband didn’t get a copy of the contract he “signed” and we even brought to their attention the fact that we didn’t sign the finance papers and didn’t even find out the interest rate or bank and they said they already knew we were approved they just didn’t know by who so they let us drive off the lot with the car and all and for a FACT we didn’t have any info on the bank or rate do to it being so late and now we have no contract or proof because they said they didn’t have to provide the contract to us unless we asked for it. Mind u this was at Casa Nissan.

  • bill

    What if you go to dealership with trade in they know you have a title pawn lien on car and they still finance you another car without the title can the dealership get car back

    • Hi Bill, I’m not sure how that works, to be honest. I would suggest talking to some people in the auto loan industry to find out what the rules are in that case.

      • dj

        hi I recently got a car form a dealer ship paid the payments up for a hole year and paying and now paying on my old car still because the sales person lied to me and said they would take care of the payments if the car was totaled or not totaled so I can’t afford both cars the new car is paid up for a hole year but I want to take the new car back because I’ll have trouble paying for it next year so can I take the car back being that its paid up for a hole year and get some money back to pay on my old car back that I’m still making payments on

  • Angelica

    Hello, at the time I helped out my boyfriend now ex to get a car out. I helped him with my credit and with the first down payment. This was in mid July 2014 in California. He has been making the payments (roughly by couple of days behind the due date) and got insurance. Now, I want to get my self out of the hole I dug into. I have reasons where I know he wont be able to pay off the car and that he will hit the car. (which already happened on Oct.) We have no communication at all. A month ago on Nov. I send out an email telling him that want to take over the car, he said “no”. Now, can I actually take over the car even though the contract does state that I am the buyer and he is the co buyer and on the car registration has both of our names. Can I do a voluntarily repossession without his consent? Who do I speak to if I go with the repossession of the car to the dealership or finance company? I hope you can answer my question. thanks

    • gloria

      Jessica….Did anyone respond to your question? Im on the exact same boat. Please let me know if anyone responded and if you were able to solve your situation. Thank you.

      • Angelica

        Hello, my question was never answered, but he got the r as a total lost. Insurance then paid for the car. So their is no more car between us. Best of luck.

    • Hector

      give me your cel can have a solution

  • mariela

    if i volutary reposses my car due to them increasing my monthly payments to almost what we pay for mortage. insane…. ! can i get back the money we spent on it or is it just. lost. and was a waste of money. weve had it for 2 years .

    • manuel furtado

      Why would anyone waite 2 years,

  • Mary

    What’s the longest the dealership will wait if you haven’t made a payment? And will they take my car? If so will I be able to get it back by just paying the payments I owe?

  • Anthony

    If there is s repo guy out for my car can I sell it to a dealer before he is able to get the vehicle?

  • WBM of Arlington

    These are some great tips to alleviate some worries for not getting the full value back! I like how the article mentioned coming to grip with the numbers, usually when that is taken car of the owner can work something out. Great read!

  • Iris

    Even if I do a voluntary repossession? I’m still liable to pay off the loan amount?

    • Roger Williams

      Usually, yes, but depending on the value of the car and your remaining balance, most reputable lenders would work out a payment plan with you to pay off the balance.
      In most cases, the monthly payment, including fees, is far less than your original car payment when you had the full loan to pay off.

      Also, in many states, the remaining balance is dischargeable when filing for bankruptcy. Just make sure to mention the remaining balance to your bankruptcy attorney.

  • Kia Of Auburn

    Car transactions in general are really big decisions that require a lot of thinking to make sure you make the right choice. This is a great post thanks for sharing!

  • Sam

    I just bought a 2005 Honda Accord about 2weeks ago. The dealer said he’d get me a good deal and a good car that would work for me. I found the car I had seen online and loved it. Runs good and has minor cosmetic flaws. Was going for about 13grand but at the end of the sell, Total came to 20grand with monthly payments of $420. I now feel really stupid for actually going through with the deal when I know practically nothing about cars and how these whole deals go. The guy seemed really helpful and trustworthy. But, once I got home and sat down to go through the paperwork, it hit me how high the price was for a not so new car and surely, other people I’ve mentioned the price to, told me I’ve been ripped off. I should’ve thought it through, I know. But, I was in need of a car for work since weekly I was paying $200 for rides with uber JUST to and from work. Worst part, my boyfriend just bought me a car and is furious about the purchase I’ve made. Now my dilemma is whether they’d be willing to take the car back.

    • Jennifer Paine

      Sam, I would be happy to review everything with you. I feel you may be looking at your finance contract which shows the principal balance (amount you agreed upon with the dealer), plus the interest accrued over the term of the loan, plus any down payment you made (if any), plus any trade equity (if any), plus any add on you may have opted for, etc. Even I have looked at my own paperwork and said, “I paid what?”

      Of all the crazy forms you signed, there is a buyers order (bill of sale….the name can vary by state), this one will have nothing about monthly payments or interest. Then there is one that has apr, monthly payments, interest charges, etc. Hell, both are confusing, especially the second one.

      Basically, look at the bill of sale (it should say something like, “amount due to dealer” or something close. (Amount due, total purchase, etc etc)….then look at the finance form, the line at the bottom of your “receipt ” from the form I mentioned, should match up in the federal truth in lending box.

      Easier to explain…sorry for the long post. Unlike bloggers, I’m not promoting. Email me at if you have more questions.

      • Jennifer Paine

        That second form is no different than what you would see from your own bank. The price you paid, plus the interest, etc.

    • manuel furtado

      Its not the dealers car any longer it is owned by the finance company until u pay it off.

  • Chrisla Sinfar

    So basically I bought a car back in August of last year and I believe the car was $17,000 it was a 2011 Toyota Corolla and I think I got ripped off because my car payment is 473 a month and it’s becoming way out of hand and in the beginning I thought that it would be OK to pay 473 a month because I was working two jobs but then two weeks ago I went to the dealership to try to get my payments of the word because I was in school and I was doing an internship and the sales manager who did help me at the time when I first bought the car told me that in order for me to refinance the car I would have to put money down which didn’t make any sense to me so now I am thinking about returning The car and now another guy was helping with this car is telling me that I have over $20,000 left to pay on the car which is basically another six years left what should I do ?? I feel like I am in a really big hole right now I am only 25 years old and my parents have helped me tremendously since I’ve been in this internship I am currently unemployed still looking for a career in my field and it’s been really hard to find a job since I graduated a week ago and I am really considering returning this car this Saturday so if there’s anyone that could possibly tell me what do you think I could do that would be great thanks

    • #Mr.Excellent~1

      Hello Chrisla!Yes,the dealership overpriced your 2011 Toyota Corolla.I use to have one too,but had it refinanced with Capital One and the payments went from $335 to $270 month.So,you should most def give them a try & the process is very easy.I hate..the reply is late,but hopefully it helps yourself & other’s on this site.

  • Odz

    Hi I bought a car in May 2015 then I had an accident then the car was written off. I went to the dealer friday nd purchase another car, but to my surprise my insurance company did settle the whole amount so now I’ll have to pay two instalments. I want to return this new car back to the dealer bcz I can’t afford. How possible is that?plz help

    • Odz

      My insurance company did not settle the whole balance so m worried about affordability. Can I return back the new car?

  • Elvy Stickney

    I bought a car last October. A 2003 ford focus zx3, but the dealership made promises and weren’t forthcoming about the cost and Interest rates. I don’t want to be stuck paying 11k for a car that doesn’t even sell for 2k on craigslist. Is there an easier way to do this?

  • LelahZayas

    Hello, I have a question about volunteer repossession. I have a 2010 Chevy Equinox with a payment of 456 and at least 3 more years to pay. This truck has many problems with it that would cost more than its worth. Not only that, there is about $16,000 left to pay and the value of this vehicle is about $6000. My question is, is there a way I can give this vehicle back the the bank without having to put any money out because the vehicle is a piece of crap? I do not want to pay for a car that will cost me so much money out to fix when I can buy another one that is in better condition, but I cannot afford both car payments. Hope someone can answer my question. Thank you.

  • ShyAlligator

    If my boyfriend is leasing a car and the payment is to high for him to pay since he no longer has the same job he had and isn’t making as much as he used to, can he return the car and will it affect his credit score if he does return it?

  • Evelyn

    Hi. I just financed a car a little over a month and my first car payment is coming up. My question is, is there anyway I can return it? My car insurance is like another car payment and my car payment is really high. I have recently found out I am pregnant so I think the best choice would be to get rid of it dome how. Any ideas? Its just too much money a month almost $800 a month. Thank you

  • Kenyetta Ready

    My car salesman told me one monthly payment which I agreed to and then wrote up a new one to the bank. At the time I was tired, and in distressed. So, I didn’t look at my paperwork or until AFTER I had the BRAND NEW CAR for ONLY 6 days. Can I have the contract voided? Or can I return the car withOUT penalty? This will be the second time this dealership has burned me and took advantage of me.